LOGISTICS
Question 1: Discussing the Integrator Business Model
The integrator business model is greatly being embraced across industries. Development in the recent past have influenced its impacts, with the growth in globalization. Given that the integrator business model has been quite successful in the recent past due to various reasons, it can still be effective during the COVID-19 pandemic.
One of the success factors of the model is that it has been greatly supported by the growth in infrastructure. The model operates in an environment that requires effective communication (Valter et al. 2018, p.100). The integration of the supply chain, production, assembly, and marketing is supported by conducive communication channels, which have been improved by factors like the growth of the internet. In addition, the internet has supported internal systems, such that the various functions in an organizations can collaborate.
Technological advancement has been a critical feature that complements infrastructure. There are more effective ways that have enabled streamlined operations (Jakšić et al. 2018, p.419). For instance, companies have started using systems that link various functions in the organizations. Accordingly, the requirements of any function can be known to the others. Technology is further facilitated by equipment such as computers that are presently accommodative of various functions. In addition, technology extends from the administrative functions to the production process. It has enabled integration of functions.
The other reason why the model has been implemented in organization is its impact on competitiveness. The model has promoted various strategies that influence competitiveness (Ahmed et al. 2020). To start with, it helps in reducing the costs of operations. The integration eliminates redundancy in organizations, thereby reducing the costs of labor and space. In addition, organizations can reduce the queuing time, subsequently implying that the organization can offset some of the work in progress. Accordingly, it can dedicate the saved costs elsewhere, such as expanding to newer markets.
The integrated business model has been significant in allowing the organization to focus on the development strategy of quality. The company reduces some of its operations such as the entire manufacturing process, and outsources from suppliers (Ahmed et al. 2020). It integrates its objectives to those of suppliers, and it can dictate the quality of materials that it expects. It considers credible and consistent suppliers, and can thus assure the market high quality products. In addition, the company can concentrate on the services it delivers. There has been a realization of the effectiveness of differentiation in the delivery of services and customer care. While there can be little differentiation in the nature of products, handling customers has led to variances in the market share of companies in the same industry. For instance, there can be negligible differences in the tastes of beverages. However, the experiences in the outlets and
The integrator business model can still be applied in the current COVID-19 environment. Observably, the model allows for production from different regions. The pandemic has resulted in new conditions as a way of managing it (Yu et al. 2020). For instance, there are restricted movements. Integration allows for remote operations, thus reducing the need to move, which in turn helps to stop the pandemic by avoiding unnecessary contacts.
Visibility in global logistics management has significantly streamlined processes relating to global supply. The visibility is characterized by orchestration of systems and people. There requires consistent interactions, during which time would be wasted without visibility. For instance, as clearing is being conducted, the involved personnel have to contact the customers, and identify the actual sources of the products. However, visibility has enabled the tracking of the movement of cargo. Ahmed et al. (2020) precisely observe it helps in making informed supply and demand logistics. Therefore, there is efficiency in delivery with visibility.
One of the outstanding example of a company that has succeeded from using the model is the Ford Company. The company controls manufacturing from a central point, and then assembles the parts as delivered by the suppliers (Hansel 2015). The suppliers are acquainted to the standards that the company expects from them. They are also aware about how the parts will be integrated to others for the whole system to work. The company achieves this by ensuring that the partnership with suppliers is compact. It offers the necessary support such as information about the requirements, and assistance in research and development.
Notably, the integrator business model has been impactful on organizational growth. It has enabled smooth transitions in operations, and improve visibility. It has been promoted by the growth in infrastructure as well as developed technology. Companies like Ford have benefited from the model since they can concentrate on quality management. The model has provided for competitiveness, and it is quite practical even with the COVID-19 pandemic.
Question 2: Factors Causing Global Supply Chains to ‘Shrink’
Global supply chain is the distribution of materials and products to various countries worldwide with the aim of reducing costs and waste. Essila (2019, p.2-5) expounds that it relates to areas such as logistics, supply and operations management, and competition. It can be influenced by factors such as policies that affect social issues. It is further affected by the forces of supply and demand. It engages information, resources, procedures, and the people conducting the logistics as well as those demanding and supplying the goods. While organizations are expected to be experiencing progress in global supply chain management, COVID-19 among other factors can be attributed to its shrink.
One of the main reasons why the global supply chain is dwindling is due to the COVID-19 outbreak that has led to the closure of production sites. China recorded infections in the late 2019, and identified that one of the ways of controlling its spread was by restricting movement from the areas that were affected. Accordingly, there was reduced production, which subsequently meant that the demand for goods in other regions could not be met. In addition, the supply chain involves the people, and they were quite affected as they could not appropriately perform. Therefore, it led to hitches in supply. Seric et al. (2020) establish that the imports and exports in China have greatly declined. They assert that the country is at the core of global supply chain, given that most production companies have based their manufacturing companies in the country. Accordingly, the cessation of movement and quarantine that has happened in China has adversely affected the supply chain.
While technology is a significant factor in global supply chain, it has the negative effects of creating awareness of the production processes and offering the necessary equipment for local production. Businesses base their model on the way they will add value to materials to make them appealing to customers (Ofreneo 2016, p.50-51). For instance, manufacturing in the automotive industry adds value to materials like metal, to make them more valuable so that the end product can be used by the customer for moving. Information about the manufacturing process can be accessible, which has then implied that regions that could not manufacture them can presently use it to do local production, hence reducing the need for global supply chain. In addition, technology has become universal. While some production equipment could only be accessible in particular countries, they can now be sourced, and production done locally. Therefore, the supply changes from finished products to production equipment, whereby the latter has a lower frequency and thus shrinking global supply chain.
Policies are structured to favor local production. Governments have realized that they attain a balance of trade with increased domestic production (Mangla et al. 2018, p.551). It contradicts the case whereby the countries export raw materials for a certain product, only to buy the final product at exorbitant prices. For instance, the coffee producing countries sell the bulk of it to developed countries that have the appropriate technology for processing high quality coffee, and then sell it back at high prices. There is recently a trend in which governments are empowering the people to enhance local production, and so affecting global supply chain.
The downward trend in the global supply chain will cause a decline in ocean shipping. Clearly, there will be a decrease in the amount of products to be distributed, thus eliminating the need for the shipping. However, the reduced cargo will mostly be of raw materials (Chen 2017). While production will be eventually be more localized, there will still be the movement of materials from the places they are in plenty to those in which the materials are scarce. It can also be noted that as countries gradually develop resources that they own, there will be an increase of finished goods. For instance in the mentioned coffee case, the producers will only be exporting packaged coffee to countries that do not farm coffee.
Conclusively, there has been a revolution that has led to a reduction in the need for global supplies. It has been mostly due to a change in policies to support local production, free and readily available information, and growth in technology. Notably, the current trends in ocean shipping will be restructured, with countries eventually exporting finished goods. Clearly, with conditions imposed by COVID-19 alongside other factors, global supply chain is prone to a diversity of changes.
Reference List
Ahmed Saqib, Z., Ahmed Saqib, K., Ou, J., 2020. Role of Visibility in Supply Chain Management, in: Modern Perspectives in Business Applications.
Chen, Z., 2017. The Influence of 3D Printing on Global Container Multimodal Transport System. Complexity 2017.
ESSILA, J. C. (2019). Managing operations throughout global supply chains.
Hansel, M. 2015. Ford Performance Uses Global Integration Strategy to Improve Products for Race Drivers, Consumers. Tribune. Retrieved on 16th June 16, 2020 from https://www.nkytribune.com/2015/07/ford-performance-uses-global-integration-strategy-to-improve-products-for-race-drivers-consumers/
Jakšić, M.L., Rakićević, J., Jovanović, M., 2018. Sustainable technology and business innovation framework – A comprehensive approach. Amfiteatru Economic 20, 418–436.
Mangla, S.K., Luthra, S., Dwivedi, Y., 2018. Barriers to effective circular supply chain management in a developing country context. Production Planning and Control 29, 551–569.
Ofreneo, R.E., 2016. Auto and car parts production: can the Philippines catch up with Asia? Asia Pacific Business Review 22, 48–64.
Valter, P., Lindgren, P., Prasad, R., 2018. Advanced Business Model Innovation Supported by Artificial Intelligence and Deep Learning. Wireless Personal Communications 100, 97–111.
Yu, K.D.S., Aviso, K.B., 2020. Modelling the Economic Impact and Ripple Effects of Disease Outbreaks. Process Integration and Optimization for Sustainability.
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